Passat CC Kicks Off VW’s Drive to 800,000 Sales in U.S.

Special Coverage

North American Int’l Auto Show

DETROIT – Volkswagen AG is setting the bar high when it comes to its U.S. operations, targeting a near quadrupling of annual sales within the next 10 years.

Here at the North American International Auto Show to unveil the Passat CC 4-door coupe VW intends as a kick-off to its new sales and brand-polishing drive in America, Management Board Chairman Martin Winterkorn says the auto maker is “putting the pedal to the metal” in the U.S.

“The U.S. has top priority for VW,” he says. “Plans are to sell 800,000 Volkswagens a year by 2018, so it is full speed ahead for us in the U.S.”

Winterkorn says VW has “sent its best people” here and is working on new compact and midsize sedans designed specifically for the U.S. market in order to achieve its ambitious volume goals.

The new U.S. sales target is part of a broader plan to expand global sales of the VW brand to 6.6 million vehicles by 2018. Last year, the VW brand sold a record 3.66 million vehicles worldwide, Winterkorn says.

Volkswagen AG, overall, delivered a record 6.2 million vehicles worldwide, including Audis, Bentleys, Skodas and other brands, up 8% from 2006.

Stefan Jacoby, head of VW in the U.S., says he doesn’t mind having the aggressive sales target to live up to.

VW’s Stefan Jacoby says cars for U.S. need to be bigger.

“I like to have bold targets – especially when the U.S. strategy is just one part of a global strategy of growth,” he says.

“We just have to do this right,” he adds. “We didn’t always in the past. If we do, there’s a great chance to grow in this country. (And) if I only sell 780,000 (units) in 2018, people will see that as a good result.”

Jacoby says to achieve the target, VW will have to start designing cars with U.S. buyers in mind. That means more of the comfort features – such as cupholders – Americans expect.

“And they’ll have to have space,” says Jacoby, who has held the top spot at Volkswagen of America Inc. for about four months. “Everything is big here in the U.S. We must make our cars bigger and look more American, without giving up our heritage.”

Additional capacity also will be needed, with North America a strong contender to relieve VW from an unfavorable euro-dollar exchange rate. Jacoby says a decision on whether to build a U.S. assembly plant will come within the next six months, echoing a statement released in November at the Los Angeles auto show.

“A lot goes into the investigation,” he says. “You have to define the cycle plan and products, and the localization of parts also is very important.”

Jacoby says a decision on what vehicle would be produced at the prospective plant hasn’t been made, but it will have to be a model good for 100,000- to 120,000-unit sales annually in the U.S.

“We would need to build volume models here,” he says.

The Passat CC is the first new car aimed at recasting VW’s U.S. image.

“It will lift the brand upward,” Jacoby promises, adding the car is “classier” than a standard Passat sedan.

Media gather around new VW Passat CC 4-door coupe at press preview.

Sales will launch later this year, and Jacoby says volumes will total about 20,000-25,000 units in the car’s first full year.

Also expected to help boost VW volume is a new minivan, a derivative of the Chrysler Town & Country that Chrysler LLC will supply beginning later this year. Jacoby declines to peg volume expectations but says, “We will sell a lot of them.”

Not coming to the U.S. is the new Scirocco, expected in Europe by 2009.

“That doesn’t fit here,” he says. “We don’t have to bring every model here to the U.S.”

Overall, Jacoby says VW needs four high-volume, core vehicles, plus a group of specialty models to meet its 2018 U.S. sales goals.

“We want to be in the main segments of cars and CUVs, and add more models like the Passat CC,” he says.

Likely to return to the lineup is the ultra-luxury Phaeton that was dropped from the U.S. after sluggish demand but remains available in Europe.

“I thought it a mistake (to discontinue the car in the U.S.),” Jacoby says. “We’ll have to think about bringing the Phaeton back.”

Despite widespread predictions of an industry-wide market slump in 2008, Jacoby says he believes VW will increase sales this year.

“This year will be more than last year,” he says, declining to provide specifics.

[email protected]